Budget message from County Administrator

I am pleased to present the 2024 budget for Mesa County. The total county budget is $261.1M, an increase of $18.5M (7.6%) from the 2023 adopted budget. The net county budget, which deducts interfund transfers and charges, totals $234.2M. The budget is balanced according to all applicable Colorado State statutes and Mesa County financial policies, and represents the County’s financial plan for January 1 through December 31, 2024.

Budgeting to Our Strategic Plan

Last year, the County completed a new strategic plan that outlines key priorities that will guide our efforts to serve Mesa County residents in the years to come. The result of extensive staff input and collaboration between department heads, elected officials, and County leadership, the new strategic plan identifies the goals we want to achieve in serving the community, strategies to help us reach those goals, and the measures we will use to hold ourselves accountable along the way. The plan centers on the County’s new vision and mission statements, and identifies four strategic initiatives to guide our work toward accomplishing the mission and vision.

Over the past year and continuing into FY 2024, we will continue to implement the goals set forth under these four initiatives. I’m impressed by the hard work, commitment, and creativity of Team Mesa as we tackle improving constituent services, recruiting and retaining great employees, and coordinating across departments and with other local agencies to address needs identified by the community.

This year, County staff have made a concerted effort to shape the budget process around the strategic plan. Departments responded to the initiative by assessing how their plans for the upcoming year could advance our shared goals. The budget review team evaluated departments' objectives and performance indicators and prioritized budget requests with the greatest impact on the outcomes identified in the strategic plan. As a result, the budget contains a number of recommendations to help catalyze further progress on our four initiatives. Below, I've highlighted a few of the most significant strategic investments that we plan to make in 2024.

• $3.2M increase in total compensation
• 0% no change in employee health insurance premiums
• 14 new FTE to improve quality of services
• $3.6M for a new finance system to streamline services and improve transparency
• 100% completion of the Clifton Community Campus and De Beque Community Hall
• $22.5M end of year General Fund reserves

Mesa County’s post-pandemic economic recovery has paced much of the state, spurred by steady population inflows, rapid employment growth, increased levels of consumer spending, and a hot housing market coupled with a multi-year construction boom. These trends, in addition to State and Federal government spending during and after the pandemic, contributed to a rate of revenue growth Mesa County had not seen since before the last recession.

Clouds are gathering on the horizon, however, as many indicators point toward a slowing of economic activity, if not a recession. Inflation remains stubbornly high, eating into recent wage gains and forcing many households to make difficult decisions, like whether to pay monthly bills or buy groceries. Building activity has begun to slow in our region, due in part to the high cost of materials. The run up in housing prices over the last several years has benefitted many property owners but also shut out a number of prospective homebuyers. To tame inflation, the Federal Reserve has aggressively raised interest rates, increasing the likelihood of a correction in the housing market. Nationally and globally, the economy appears fragile.

Taking into account both local strengths as well as warning signs in the broader economy, we have taken a conservative approach to estimating sales and use taxes. Total sales and use taxes are budgeted at $65.5M in the 2024 budget. While this represents a $2.2M (3%) increase over the 2023 adopted budget, it assumes no increase over the trend in actual collections experienced through October of 2023.

Property tax revenues are projected to be approximately $30M in 2024. This is an estimated amount at this point developed by working with the Assessors Office. In December 2023 the State Legislature adopted SB 23B-001. This changed the timeline for the Assessor to provide the certificate of value to January 3, 2024. It also changed the time for the county to set its Mill levy to January 10th, 2024. The Bill also allows Supplemental budgets to be adopted in the future once the true assessed value is known.

Unlike the vast majority of counties in Colorado, Mesa County remains subject to the annual revenue limit imposed by Article X, Section 20 of the Colorado State Constitution, better known as the Taxpayer’s Bill of Rights (TABOR). As a result, the County must refund any revenues collected in excess of the limit, unless the revenues are exempted by the TABOR amendment or a voter-approved referendum. In 2022, the County refunded nearly $12.7M in excess revenues collected to County residents. Because future revenue limits and thus excess revenues depend on a number of factors that are difficult to predict, the County budget does not include an estimate of future excess revenues. However, the County does strive to develop a budget that is not only balanced according to Colorado State Statute, but that also accounts for the need to refund excess revenues.

Mesa County’s budget encompasses 30 different funds, more than 31 distinct departments and functions, and 7 elected offices. The General Fund is the County’s largest operating fund and supports the majority of our departments and elected offices. Many of the services with which residents interact daily are supported by the General Fund. In 2024, the General Fund budget is $91M, a $12M (15%) increase from the 2023 adopted budget.

The second largest component of the budget is the Capital Improvement Program (CIP), supported by the Capital Fund. The CIP is a 6-year plan for undertaking major capital projects related to County facilities, technology, public transit, and transportation infrastructure. The 2024 budget includes $66.7M in CIP expenditures, of which $63.3M will come from the County’s Capital Fund.

Mesa County also continues to invest federal pandemic relief funds from the American Rescue Plan Act (ARPA). In 2021 and 2022, Mesa County received a total of $29.9M in ARPA funds. By the end of 2024, we expect to have encumbered or spent the entire $29.9M of these funds on eligible projects including the Clifton Community Campus and De Beque Community Hall, improvements to water and sewer infrastructure in the Towns of De Beque and Mesa, enhanced broadband access in Collbran, and a community health clinic in Palisade.

The budget also includes the addition of 14 new positions across 7 departments. This represents a little over 1% increase in County FTE from the current staffing level. The new positions will enhance the quality of County services and enable departments to proactively meet residents’ needs related to public safety, financial oversight and transparency, and maintaining and improving County infrastructure.

The budget sets forth a plan for investing in strategic priorities while protecting Mesa County’s fiscal health in the midst of an uncertain economic future. Putting together a budget that accomplishes these important goals would not be possible without the effort of a dedicated team. I would especially like to thank the members of the Budget Review Team for going above and beyond their everyday duties to assist in the preparation of the budget: Pam Noonan, Connie Hahn, Todd Hollenbeck, Matt King, Brenda Moore, Kim Manzanares, Melissa Salaver and Spencer Rockwell. Looking ahead to 2024, I am excited by the opportunity to continue serving our residents and proud of the work Team Mesa does every day to make Mesa County the best place to live, work, and play for all generations.

Sincerely,

Peter M. Baier, PE, MPA

County Administrator